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September Unemployment Metrics

We are arguably in the midst of an economic downturn the likes of which our country has not seen in decades. This past month, the economy posted some horrific unemployment numbers and recorded some new highs and lows. The House Republican Conference (HRC), chaired by Rep. Mike Pence (R-IN), has recently released its latest unemployment fact sheet which reveals the numbers behind some of these troubling trends.

The most widely quoted statistic is that unemployment rose from 9.7% in August to 9.8% in September. It is also commonly reported that 263,000 net jobs were lost in the month. However, the number of people who were actually laid off in September is 1.92 million which is the highest single-month total ever. That brought the overall number of unemployed persons looking for work to 15.14 million, another new record. Since the stimulus was passed in February, almost 2.9 million net jobs have been lost after taking into accounts all jobs created in that timeframe.

The numbers publicized by the HRC also reveal the discouraged state of the American public, a result of the depressed economy. Currently, there are 1.1 million new members of the workforce seeking jobs. There are 9.2 million people working part-time because full-time employment has become unavailable. To make matters worse, 5.44 million people have been unemployed and struggling to find work for more than 27 weeks, a new high. Job seekers are unemployed for an average of 26.2 weeks after losing their jobs, the longest average since the statistics was first recorded in 1948. And for the first time, state unemployment benefits do not cover the average time someone is unemployed. As a result, 2.2 million people who want to work have stopped looking because of the disheartening state of the economy.

Below is a list of other HRC numbers worth noting:

25.9%: Unemployment rate among job seekers between the ages of 16 and 19—the highest level since the statistic was first measured in 1948.

Senator Bernie Sanders (I-Vt.) gave a highly anticipated speech at Georgetown University on Thursday, where he extolled socialism. The Democratic presidential candidate, whose proposed an estimated $18 trillion in new spending over the next decade, invoked President Franklin D. Roosevelt and the New Deal in his effort to sell his message to college students.

The jobs report, released the first Friday of every month by the Bureau of Labor Statistics, is one of the most closely watched indicators of how the economy is doing. The report collects a wide variety of statistics on employment and labor utilization, in an attempt to paint an overall picture of the American labor market. Over the few months, the Obama administration has been pleased with the numbers, with the official unemployment rate ticking down consistently, albeit at a glacial pace.

Are you feeling the recovery yet? You should be, at least according to the president. In his State of the Union address, he said that the economy had “turned the page” and that “the shadow of crisis has passed.” Official government statistics put the unemployment rate at just 5.6 percent, there is no inflation, and GDP growth in the third quarter of 2014 was a booming 5 percent. Never mind that fourth quarter growth was half that, and the economy actually shrank in the first quarter - cherry picking is only bad when other people do it - just keep your eye on the shiny golden 5!

“[T]here's a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market.”

Early this month, the Pew Research Center released its News IQ Quiz, in order to survey the general public’s level of knowledge about current events. This provided no end of fun for commentators, gleefully mocking the average American’s ignorance, as if knowing the minimum wage or the Chair of the Federal Reserve has any relevance to most people’s lives, when many are still struggling to find jobs and feed their families.

On Friday, May 2, the White House was happy to announce the lowest US unemployment rate since September 2008. As reported by the Bureau of Labor Statistics, with 288,000 nonfarm jobs added to the economy, the unemployment rate dropped from 6.7% to 6.3% in April 2014.

This morning the Bureau of Labor Statistics (BLS), an office within the Department of Labor, announced the unemployment rate for November 2013. As currently calculated, the unemployment rate has indeed fallen to 7.0 percent. The problem is that since the national economy has deteriorated to such a severe degree over the past half-decade the BLS calculations have become a wildly inaccurate way to gauge the health of the broader economy.

At first glance June's jobs report from the Department of Labor sounds pretty good: the economy added 195,000 jobs in the month and the unemployment rate stayed steady at 7.6-percent. See, that doesn't sound so bad, and the White House was quick to tell the country how fantastic those 195,000 jobs are, but the real story isn't so rosy.

We get a lot of e-mails at FreedomWorks from people who want to know which economic policies we endorse and why we endorse them. This is a good thing. Economics is a specialty, and it does the republic no good when people pretend to understand economics but aren’t available to discuss their ideas. (This is only a slight jab at Paul Krugman’s debate jitters).